Dick’s Sporting Goods invests $32 million in a U.K. retailer
April 5, 2012 01:46 PM
Dick’s Sporting Goods Inc. is expanding into the United Kingdom with a 20 million pound ($31.7 million) investment in JJB Sports, a sporting goods retail chain. The investment must be approved by JJB shareholders.
Dick’s, No. 126 in the Internet Retailer Top 500 Guide, also has the option to purchase an additional 20 million pounds ($31.7 million) worth of JJB Sports stock and expects to do so in the first quarter of 2013, the company says. Once the subsequent purchase is approved Dick’s will be the majority shareholder in JJB stock.
JJB, No. 202 in the Top 400 Europe, operates JJBSports.com and 180 stores in the U.K. and Ireland. The e-retailer brought in an Internet Retailer-estimated 36.1 million pounds ($56.4 million) in web sales in 2011.
As part of yesterday’s deal, Dick's will nominate up to two JJB board members and will have board oversight rights in certain circumstances, Dick’s says
"This is an exciting strategic investment that provides us with a valuable introduction into the workings of the United Kingdom sporting goods market from an established company that shares our commitment to serving the needs of core athletes," says Edward W. Stack, chairman and CEO of Dick’s Sporting Goods.
The investment also will enable Dick’s to better understand U.K. athletes, Stack says, “which will serve as a stepping stone for our company's future growth and development."
In another move, Dick’s purchased the Top-Flite brand from Callaway Golf Co., No. 301 in the Top 500 Guide, both companies announced yesterday. Top-Flite makes golf balls, clubs and other golf gear. Earlier this year, Callaway completed the sale of the Ben Hogan brand of golf gear, which the company acquired along with Top-Flite in 2003. Both divestitures followed a restructuring at Callaway Golf designed to streamline the company to reduce costs and increase the focus on its core business units, Callaway says.
2011 web sales at Callaway Golf Interactive, the company’s e-commerce division, were an Internet Retailer-estimated $34.4 million, up by 4.2% from $33.0 million in 2010.